How to apply for student loans


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Student loans can make college more accessible. Learn how to apply for student loans and the eligibility requirements you’ll need to meet. (Shutterstock)

When you’re applying for student loans for the first time, it’s easy to feel overwhelmed. You can choose between federal student loans from the government or private student loans from private lenders. You should always exhaust your federal loan options first before turning to private loans. 

Whether you need federal loans, private loans, or both, here’s how to apply for student loans and the general qualifications you’ll need to meet. 

If you exhaust all your federal loan options, you may need to turn to private loans to cover your remaining education costs. Visit Credible to learn more about student loans and see your prequalified private student loan rates in minutes.

How to apply for federal student loans

The U.S. Department of Education offers federal student loans. These loans come with perks like low, fixed interest rates, flexible repayment plans, deferment and forbearance, and the possibility for forgiveness. Because of this, you should apply for federal loans before turning to private loans. Here’s how to apply for federal student loans:

Step 1: Know your federal loan options

Most federal student loans fall into two categories: subsidized and unsubsidized. With subsidized loans, the federal government pays the interest that accrues while you’re in school at least half-time, which will save you money over the life of the loan. But these loans are only available to students who demonstrate financial need, and you can only borrow up to a certain amount per year.

With unsubsidized loans, you’ll be responsible for paying the interest that accrues, including while you’re in school. The good news is these loans have higher borrowing limits, and you don’t have to prove financial need.

While subsidized and unsubsidized loans are the most common, the federal government also offers Direct PLUS Loans, which are available to eligible parents, as well as graduate or professional students.  

WHAT’S THE DIFFERENCE BETWEEN SUBSIDIZED AND UNSUBSIDIZED STUDENT LOANS?

Step 2: Prepare any documents and information you might need

Once you understand what type of loans might be available to you, it’s time to gather any documents or information you’ll need before you apply, including: 

  • Social Security number or Alien Registration Number
  • Federal income tax returns and W-2 forms
  • Bank and investment statements
  • Records of untaxed income

If you’re an independent student, you’ll only need the above information for yourself. But if you’re a dependent student, you’ll need the same information and documents for your parents.

Step 3: Fill out the FAFSA

The Free Application for Federal Student Aid (FAFSA) is the form that all students and their families use to apply for federal aid — including grants, scholarships, and student loans. In the FAFSA, you’ll share important information about your family’s finances to help the federal government and schools determine how much your family can reasonably afford and how much aid you might be eligible for.

To complete the FAFSA, visit the StudentAid.gov website.

ARE THERE ANY FAFSA INCOME LIMITS?

Step 4: Review your Student Aid Report

After you complete your FAFSA, you’ll receive a Student Aid Report, or SAR, which summarizes the information on your FAFSA, reports your Expected Family Contribution, and includes what federal aid you’re likely eligible for.

You can expect to receive this report in as little as three to five days if you provided an email address, or as long as two to three weeks if you didn’t provide an email address.

Review the information in the SAR when it arrives to make sure everything is correct. If you spot an error, you’ll need to make corrections or updates to your FAFSA.

Step 5: Fill out a CollegeBoard CSS profile

Depending on what school you’ve applied to, you may also want to complete a CollegeBoard CSS profile. This application is similar to the FAFSA, but rather than determining if you’re eligible for federal student aid, it helps you qualify for institutional aid from colleges and universities.

Once you’ve applied and listed the schools you’re considering, you can learn if you’re eligible for any scholarships or grants from those schools. Each school has a different deadline for completing the CSS Profile, but most require that you complete it before the end of your senior year of high school.

Completing a CSS Profile is free to undergraduate students whose family income is below $100,000. For families with an income above that amount, the fee for the initial application is $25, and additional reports cost $16. 

Step 6: Review your financial aid letter and decide which financial aid to accept

Next, you’ll receive a financial aid offer letter from the financial aid office of the school or schools you applied to, either electronically or by mail.

Your offer letter will list the financial aid you’re qualified for, including loans, grants, work-study programs, and scholarships from the federal government, state government, and the school you’re attending.

The letter will also include information about the price of attending the school: the total cost of attendance, your Expected Family Contribution, and your total remaining costs after financial aid. Speak with your school’s financial aid office if you have questions about your offer. 

It’s always worth accepting grants or scholarships since they’re essentially free money that you don’t have to pay back. And federal work-study, while it does require that you work for the funds, won’t have to be repaid either.

SURVEY: FAFSA CHANGES ARE COMING, BUT 52% OF COLLEGES AREN’T PREPARED

How to apply for private student loans

If you can’t get enough federal money to fully pay for school, private loans may help cover your remaining education costs.

Private lenders offer private loans, and you typically need good to excellent credit to qualify. If you have solid credit, you may have access to lower interest rates. Additionally, you can often borrow up to the full cost of attendance at your school, which isn’t the case with federal loans. 

But these loans have some downsides. Since many first-time student loan borrowers may not have established a credit history, they may need to apply with a cosigner to qualify. And if you or your cosigner don’t have good credit, you may be stuck with a high interest rate.

Private loans are also less flexible when it comes to repayment. You may be required to make loan payments as soon as the loan funds are disbursed. And once you graduate, you may have fixed payments that aren’t based on your income.

Here’s how to apply for private student loans to supplement your federal aid:

Step 1: Compare rates from multiple lenders

The good news is there’s no shortage of private lenders to choose from. But because there are so many, it may be challenging to find the best one for you. A great starting point is to compare interest rates and loan terms across many lenders. The better your interest rate, the less money your student loans will cost you in the long run.

Credible makes it easy to compare private student loan rates from various lenders, all in one place.

Step 2: Research lender requirements

Because private loans come from individual lenders, they can set their own loan requirements. Some may require a certain credit score or income level. Some lenders may also charge application fees or origination fees to process the loan.

Thoroughly research a lender’s requirements before applying for a loan so you don’t run into any surprises.

Step 3: Complete the application

Once you’ve found the lender with the best interest rate and feel confident in its loan requirements, complete your application. Provide any documentation the lender requests, which could include pay stubs, W-2s, and bank statements. Depending on your credit history, you may need to apply with a cosigner to increase your chances of loan approval, or of qualifying for a lower interest rate.

CAN YOU USE STUDENT LOANS TO COVER LIVING EXPENSES?

How to qualify for a student loan

Student loan qualification requirements are a bit different depending on whether you’re applying for federal or private loans.

To qualify for a federal student loan, you’ll need to:

  • Prove your financial need (for certain loan programs)
  • Be a U.S. citizen or eligible noncitizen
  • Have a valid Social Security number
  • Be enrolled or accepted in an eligible program
  • Be enrolled at least half-time
  • Maintain a satisfactory academic record
  • Complete the FAFSA
  • Have a high school diploma or equivalent

Here’s what you’ll generally need to qualify for a private student loan (though the exact requirements may vary from one lender to the next):

  • Meet a lender’s age and citizenship requirements
  • Be enrolled or accepted in an eligible program
  • Have a high school diploma or equivalent
  • Have sufficient credit history and income
  • Have a cosigner if you don’t meet credit and income requirements on your own

When to apply for a student loan

You’ll want to apply for your student loans at the right time to ensure you have the money you need to pay for school. The FAFSA application opens on Oct. 1 each year for the following school year. Here are the upcoming deadlines:

  • 2021-22 academic year: June 30, 2022
  • 2022-23 academic year: June 30, 2023
  • 2023-24 academic year: June 30, 2024

Keep in mind that each state and college may have their own deadlines for completing the FAFSA. The StudentAid.gov website lists deadlines for each state.

If you need federal student loans to help pay for school, it’s worth completing the FAFSA as soon as possible. The earlier you complete your FAFSA, the sooner you’ll know if you need to line up other types of financing. Federal loans are disbursed shortly before the start of the new school year, and if you haven’t completed the FAFSA, you may need to find other means to pay your tuition.

Additionally, some types of aid, especially those offered by schools, may have a finite amount. And the students who apply earliest will have the first chance to claim whatever aid is available.

As for private loans, it’s worth applying as soon as you know you’ll need the money, especially if your credit will make it difficult to qualify. While there’s not necessarily a deadline, you’ll want to apply at least one month before the start of school to give yourself plenty of time.

If you’re ready to apply for a private student loan, visit Credible to quickly and easily see your prequalified private student loan rates.

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